Impact of Pre-Arbitral Mechanism on Tribunal Constitution under International Treaty Law: A Call For Jurisprudential Integrity.

Introduction

The landscape of international dispute resolution continues to evolve, with a growing emphasis on efficient and effective means of addressing conflicts between states and other international actors. Within this context, pre-arbitral mechanisms have emerged as an important tool for resolving disputes before they escalate to formal arbitration proceedings. This article examines the role of pre-arbitral mechanisms under international treaty law, considering their relationship to the Vienna Convention on the Law of Treaties and the principle of party autonomy in arbitral constitution. It also explores the need for greater jurisprudential integrity in international litigation and proposes the establishment of an international watchdog authority to enhance accountability and ethical standards.

Pre-Arbitral Mechanisms in International Treaty Law

Pre-arbitral mechanisms refer to procedures and requirements that parties must undertake before initiating formal arbitration proceedings. These mechanisms are often incorporated into international treaties and investment agreements as a means of promoting amicable dispute resolution and potentially avoiding costly and time-consuming arbitration.

Common types of pre-arbitral mechanisms include:

1. Negotiation periods: Many treaties require parties to engage in good faith negotiations for a specified time period before arbitration can be initiated.

2. Mediation or conciliation: Some agreements mandate attempts at mediation or conciliation with a neutral third party before arbitration.

3. Cooling-off periods: Treaties may impose waiting periods between the emergence of a dispute and the commencement of arbitration to allow for de-escalation.

4. Local remedies requirements: Certain agreements require exhaustion of local remedies in domestic courts before international arbitration can be pursued.

5. Consultation procedures: Treaties may establish formal consultation processes between state parties to address disputes.

The incorporation of pre-arbitral mechanisms reflects a recognition that arbitration should be viewed as a last resort rather than a first option for dispute resolution. By encouraging dialogue and alternative means of settlement, these mechanisms aim to preserve relationships between parties and promote more efficient resolution of conflicts[1].

Legal Status and Enforceability

An important consideration regarding pre-arbitral mechanisms is their legal status and enforceability. While such mechanisms are typically included in treaties as binding obligations, their precise legal effect can vary. Some key issues include:

- Whether failure to comply with pre-arbitral steps deprives an arbitral tribunal of jurisdiction

- If pre-arbitral requirements are procedural or jurisdictional

- The consequences of non-compliance and potential remedies available to parties

Arbitral tribunals and courts have taken varying approaches to these questions. Some have strictly enforced pre-arbitral requirements as mandatory preconditions to arbitration, while others have adopted a more flexible stance, viewing them as procedural steps that do not impact jurisdiction[2].

The enforceability of pre-arbitral mechanisms depends on factors, such as the specific treaty language, the nature of the requirement, and the interpretive approach of the relevant decision-making body. This highlights the need for careful drafting of dispute resolution clauses to clearly articulate the intended legal effect of pre-arbitral steps.

The Vienna Convention on the Law of Treaties

The Vienna Convention on the Law of Treaties (VCLT) provides the framework for interpreting international agreements, including provisions related to dispute resolution and pre-arbitral mechanisms. Several key principles from the VCLT are relevant to this analysis:

Good Faith Interpretation

Article 31(1) of the VCLT states that treaties shall be interpreted "in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose."[3] This principle of good faith interpretation is particularly important when considering pre-arbitral mechanisms, as it requires parties and tribunals to give effect to the intended purpose of such provisions, rather than treating them as mere procedural formalities. The key is to distinguish between pre-arbitral mechanism constituting conditional consent to arbitration or as a mere procedural step which must be skipped in certain situations.

Effectiveness Principle

The principle of effectiveness (ut res magis valeat quam pereat) is an interpretive tool that encourages giving effect to all provisions of a treaty where possible. This principle supports enforcing pre-arbitral mechanisms as meaningful requirements rather than disregarding them[4].

Subsequent Practice

Article 31(3)(b) of the VCLT allows consideration of "any subsequent practice in the treaty's application which establishes the agreement of the parties regarding its interpretation." This provision may be relevant in assessing how states have implemented and interpreted pre-arbitral mechanisms in practice[5].

Supplementary Means of Interpretation

Article 32 of the VCLT permits recourse to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, to confirm the meaning resulting from Article 31 or to determine the meaning when interpretation under Article 31 leaves the meaning ambiguous or obscure or leads to a result which is manifestly absurd or unreasonable. This may be relevant in clarifying the intended role and effect of pre-arbitral mechanisms[6].

The principles enshrined in the VCLT provide important guidance for interpreting and applying pre-arbitral mechanisms in international treaties. They emphasise the need to give effect to the parties' intentions and the object and purpose of such provisions.

Party Autonomy in Arbitral Constitution

The principle of party autonomy is a cornerstone of international arbitration, allowing parties significant freedom to tailor dispute resolution procedures to their needs. This principle extends to the prescribing method of constitution of arbitral tribunals, number of arbitrators for valid composition and the overall arbitral process[7].

Scope of Party Autonomy

Party autonomy in arbitral constitution encompasses various aspects, including:

- Making arbitration conditional to certain other process

- Providing a neutral expert procedure before arbitration is available.

- Agreeing to an appointing authority and procedure for making a reference of dispute.

- Determine the method of composition of tribunal.

- Selection of arbitrators

- Number of arbitrators for valid tribunal constitution

- Choice of applicable law

- Determination of procedural rules

- Selection of seat of arbitration

- Language of proceedings

The Model Law allows national courts to entertain challenges to an arbitrator, even in instances where the parties have agreed to resolve such challenges exclusively through an appointing authority or another arrangement of their choice. This provision underscores the parties' autonomy in determining the procedures for selecting the arbitral tribunal. Judicial decisions across various jurisdictions uniformly reinforce this principle, affirming the parties' right to select the arbitrators for their arbitration. For example, the Swiss Federal Tribunal, in applying Article 179(1) of the Swiss Law on Private International Law, has held that the arbitral tribunal will be appointed, removed, or replaced in accordance with the parties' agreement. Therefore, it is within the parties’ autonomy to determine how the tribunal should be composed.

According to Gary Born in International Commercial Arbitration, 2020 ed:

Where the parties’ agreed procedures for constituting the arbitral tribunal are not complied with, the annulment of an award made by a tribunal including improperly selected arbitrators is contemplated by most national arbitration statutes and judicial decisions. Article 34(2)(a)(iv) of the UNCITRAL Model Law is representative, and arbitration legislation in other jurisdictions is again similar includes cases where arbitrators were appointed after the expiry of contractual deadlines 125 without contractually-prescribed consultations, without complying with the terms of the parties’ arbitration agreement, or where the tribunal had a different number of members than provided in the arbitration agreement.

Interaction with Pre-Arbitral Mechanisms

The principle of party autonomy interacts with pre-arbitral mechanisms in several ways:

1. Parties may modify or waive pre-arbitral requirements through subsequent agreement.

2. The interpretation and application of pre-arbitral mechanisms may be influenced by the parties' chosen procedural rules and applicable law.

3. Tribunals must balance respect for party autonomy with the need to give effect to treaty-mandated pre-arbitral steps.

4. The principle of kompetenz-kompetenz allows tribunals to rule on their own jurisdiction, including compliance with pre-arbitral requirements.

5. The question of legality of constitution of tribunal under international treaty law is distinct from kompetenz-kompetenz rule under commercial agreements. A tribunal owing its constitution to treaty may not have authority to rule on the legality of its constitution, depending on the express language of the treaty.

6. Issues of jurisdiction as to subject matter and the scope of arbitration are distinct from issues concerning valid tribunal constitution under the treaty mechanism.

Limitations on Party Autonomy

While party autonomy is a fundamental principle, it is not absolute. Limitations may arise from:

- Mandatory rules of the arbitral seat

- Public policy considerations

- Principles of procedural fairness and due process

- Specific treaty provisions that override party agreements

These limitations underscore the need to balance party autonomy with other important legal and policy considerations in international arbitration.

The Need for Jurisprudential Integrity in International Litigation

As the field of international dispute resolution continues to expand and evolve, there is a growing recognition of the need for greater jurisprudential integrity. This concept encompasses ethical standards, consistency in decision-making, and adherence to fundamental principles of justice and the rule of law.

Challenges to Jurisprudential Integrity

Several factors pose challenges to maintaining jurisprudential integrity in international litigation:

1. Fragmentation of international law across different regimes and institutions

2. Lack of binding precedent in many international forums

3. Potential conflicts of interest for arbitrators and judges

4. Concerns about the independence and impartiality of decision-makers

5. Inconsistent interpretations of similar treaty provisions

6. Limited transparency in certain arbitral proceedings

These challenges can undermine confidence in the international dispute resolution system and raise questions about the legitimacy of outcomes.

A Case Study of Indus-Waters Treaty Award on Competence of Tribunal

The PCA tribunal under Indus-Waters Treaty did not give effect to mandatory language of pre-arbitral mechanism requiring compulsory neutral expert determination of certain defined category of disputes. The tribunal was composed of 5 arbitrators instead of 7 mandated by treaty, and with one of the parties appointing the tribunal, the hearing is progressing.

The tribunal constituted under PCA rules ignored the international jurisprudence evolved by international courts like ICJ (Georgia v. Russia [2011] ICJ Rep. 70) declaring that failing to adhere to pre-arbitral mechanism results in illegal arbitration commencement under treaty context rendering constitution of tribunal as non-est in law.

Cases like Indus-waters raise a serious concern on jurisprudential integrity of international arbitration process when they bypass mandatory treaty language and inappropriately use inherent jurisdiction principle under Nottebohm's case to override international law principle under Article 31 of VCLT, 1969 which has acquired the status of customary international law on interpretation of treaties.

In Louis Dreyfus Armateurs SAS v. The Republic of India, PCA Case No. 2014-26, Decision on Jurisdiction, 22 December 2015, the tribunal held:

para 94: "States are free to condition their consent to arbitration in any way they wish, and when they unmistakably have done so it is not for tribunals to deem such requirements as merely precatory, or to permit them to be sidestepped on policy grounds that essentially substitute the tribunal's judgment for that of the Contracting Parties."

The Indus-Waters treaty award on competence of tribunal for failing to exhaust pre-arbitral mechanism and constituting tribunal with requisite 7 arbitrators as required by treaty completely ignores the consistent jurisprudence developed by international courts.

Such cases have spelled a serious doubt on jurisprudential integrity and uniform application of international law in international litigation.

Importance of Jurisprudential Integrity

Enhancing jurisprudential integrity in international litigation is crucial for several reasons:

1. Promoting predictability and legal certainty for parties

2. Ensuring fairness and equal treatment in dispute resolution

3. Strengthening the legitimacy and credibility of international tribunals

4. Fostering consistency and coherence in the development of international law

5. Upholding fundamental principles of justice and the rule of law

By prioritising jurisprudential integrity, the international community can work towards a more robust and respected system of dispute resolution.

Proposal for an International Watchdog Authority

To address the challenges outlined above and promote greater jurisprudential integrity, this article proposes the establishment of an international watchdog authority focused on oversight and accountability in international dispute resolution.

Mandate and Functions

The proposed watchdog authority would have the following key functions:

1. Monitoring compliance with ethical standards for arbitrators and judges

2. Investigating allegations of misconduct or conflicts of interest

3. Issuing advisory opinions on best practices in international litigation

4. Promoting transparency in arbitral proceedings

5. Facilitating information-sharing and dialogue between different dispute resolution forums

6. Conducting research and analysis on trends in international jurisprudence

7. Providing training and capacity-building for practitioners and decision-makers

Institutional Structure

The watchdog authority could be established as an independent body through a multilateral treaty or under the auspices of an existing international organization. Key features of its institutional structure might include:

- A governing board with representatives from diverse legal systems and regions

- A secretariat staffed by legal experts and researchers

- Regional offices to ensure global coverage and accessibility

- Committees focused on specific areas (e.g., ethics, transparency, jurisprudential analysis)

Relationship to Existing Institutions

The watchdog authority would not replace or supersede existing arbitral institutions or courts. Instead, it would serve as a complementary body focused on enhancing integrity and accountability across the international dispute resolution landscape. Collaboration with existing institutions would be essential to its success.

Conclusion

Pre-arbitral mechanisms play an increasingly important role in international treaty law, offering opportunities for efficient dispute resolution and de-escalation of conflicts. Their interpretation and application must be guided by principles from the Vienna Convention on the Law of Treaties while respecting party autonomy in arbitral constitution.

However, the complex landscape of international dispute resolution also highlights the need for greater jurisprudential integrity. The proposed international watchdog authority represents one potential avenue for addressing this need and promoting accountability, consistency, and ethical standards in international litigation.

As the field continues to evolve, ongoing dialogue and innovation will be crucial to ensuring that international dispute resolution mechanisms serve the interests of justice, efficiency, and the rule of law in an increasingly interconnected world.

[Footnotes]

Peter Kovacs, "Developments and Limits in International Jurisprudence," Denver Journal of International Law & Policy, Vol. 31, No. 3, p. 461.

[1] Gary Born, International Commercial Arbitration (3rd ed., 2021), Chapter 2.

[2] Christoph Schreuer, "Consent to Arbitration," in The Oxford Handbook of International Investment Law (2008), pp. 830-834.

[3] Vienna Convention on the Law of Treaties, Article 31(1).

[4] Richard Gardiner, Treaty Interpretation (2nd ed., 2015), Chapter 5.

[5] Vienna Convention on the Law of Treaties, Article 31(3)(b).

[6] Vienna Convention on the Law of Treaties, Article 32.

[7] Nigel Blackaby et al., Redfern and Hunter on International Arbitration (6th ed., 2015), Chapter 6.

Gary Born, International Commercial Arbitration (3rd ed., 2021), Chapter 5.

Emmanuel Gaillard and John Savage (eds.), Fouchard Gaillard Goldman on International Commercial Arbitration (1999), paras. 650-655.

Stavros Brekoulakis, "Law Applicable to Arbitrability: Revisiting the Revisited Lex Fori," in Arbitrability: International and Comparative Perspectives (2009), Chapter 6.

Morten Bergsmo et al. (eds.), Integrity in International Justice (2020), Introduction.

Yuval Shany, "Assessing the Effectiveness of International Courts: A Goal-Based Approach," American Journal of International Law, Vol. 106, No. 2 (2012), pp. 225-270.

Armin von Bogdandy and Ingo Venzke, "In Whose Name? An Investigation of International Courts' Public Authority and Its Democratic Justification," European Journal of International Law, Vol. 23, No. 1 (2012), pp. 7-41.

Philippe Sands, "Reflections on International Judicialization," European Journal of International Law, Vol. 27, No. 4 (2016), pp. 885-900.

Citations:

[1] https://ipwatchdog.com/2023/04/01/pay-attention-writing-arbitration-agreements-avoid-surprises/id=158813/

[2] https://www.cilrap.org/integrity

[3] https://icsid.worldbank.org/sites/default/files/parties_publications/C3765/Claimants'%20Reply%20(Redacted%20per%20PO8)/Legal%20Authorities/CL-0052.PDF

[4] https://digitalcommons.du.edu/cgi/viewcontent.cgi?article=1363&context=djilp

[5] https://www.cambridge.org/core/journals/leiden-journal-of-international-law/article/role-of-precedent-in-the-jurisprudence-of-the-international-court-of-justice-a-constructive-interpretation/BE3449F3A5497ACBF6C9BE28ED1FD299

[6] https://academic.oup.com/book/12583/chapter-abstract/162407753?redirectedFrom=fulltext

[7] https://law.bepress.com/cgi/viewcontent.cgi?article=2939&context=expresso

[8] (Georgia v. Russia), [2011] ICJ Rep. 70, ??115 et seq. (I.C.J.) (dismissing application to ICJ on jurisdictional grounds for failure to satisfy requirement to negotiate disputes prior to seeking judicial resolution).